Brokers confident in performance of commercial insurance

Though many insurers are still choosing to invest in persona lines, many brokers are confident that the performance of commercial insurance will outperform personal insurance products.

Brokers believe that the business insurance market’s health in the medium term will be strong while personal lines will continue to falter and soften, according to recently released research findings by professional indemnity insurance providers Sterling Insurance.

Sterling surveyed more than 400 brokers from across the UK and found that 65 per cent of respondents felt that business from commercial lines would continually improve over the coming 12 months.  Moreover, at 58 per cent, more than half of those brokers felt that personal lines business would most certainly not improve.

David Sweeney, Sterling Insurance’s director, said that personal lines brokers may be concerned about the march of direct writers while commercial lines brokers instead see potential for increased rates.   He also said that individuals are faring much less well in the current economic climate than are businesses.

It is generally believed across the insurance industry that last year’s emergency Budget, as put in place by the Coalition government, would require some time to trickle down.  2011 has been more difficult than last year for many, as people have had less money lining their pockets thanks to the increases in fuel and food costs.

Financial austerity has resulted in even the most loyal clients of many brokers to become more focused on price.  Higos Insurance Services managing director, Ian Gosden, remarked that his business has been diminishing as of late, especially in the motor market.

The Somerset-based firm simply does not have the tools to remain competitive, said Mr Gosden, as the motor dropoff is based completely on price.  However, he also said that if his firm had been getting the same or better rates than a direct insurer, Higos wouldn’t be so far behind.

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